Given the recent signs of house prices starting to level off or even come down slightly, you would be forgiven in thinking that soon prices may start to tumble. But the last 12 months have seen increases in the cost of building that may negate any decrease due to supply.
Recently we spoke about the signs that the market may finally be levelling off and that many first-time buyers may at last get their chance to get on the property ladder. However, the rise in the cost of building has put a damper on things with some developers reportedly suspending development until prices come down.
The annual inflation rate for building and construction materials alone was up to 18.2% in April. This is however a modest average, as some materials including steel and timber have seen huge increases of up to 60%. This has inevitably led to an increase in house prices. Unfortunately, there are no signs this trend will reverse any time soon.
What does this mean for landlords and investors?
While initial fears are that house prices won’t come down in line with supply, there is still hope. There will be so much progress in the near future, with many more units – particularly apartments – being brought to market, that prices will inevitably fall. While we are still dealing with the Post Covid supply issues, they should eventually come back to normal which would hopefully see a reduction in building costs once more.
With more and more apartments being released to the market, investors should seek out the professionals to help with their investment. At KPM Group we have been leading the way in Block management in Ireland for over 25 years. If there is anything we can do for you, please don’t hesitate to give us a call and a member of staff will be happy to help in any way we can.